BUS 320-chapter 4 notes

BUS 320-chapter 4 notes - BUS 320 Chapter 4 Analysis of...

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BUS 320 Chapter 4 Analysis of Financial Statements
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If management is to maximize a firm’s value, it must take advantage of its strengths and correct its weaknesses. Financial Analysis involves: Comparing firm’s performance to other firms in the same industry. Evaluating trends in the firm’s financial position over time.
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To an investor financial analysis is all about predicting the future. To management useful both for: Helping anticipate future conditions. Starting point for planning actions that will improve future performance.
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Liquidity Ratios -measure the relationship of a firms cash and other current assets to current liabilities. Asset Management Ratios -Measure how effectively a firm is managing its assets. Debt Management Ratios -Measures the amount of debt financing is utilized. Profitability Ratios -Measure combined effects of liquidity, asset management and debt on operating results. Market Value Ratios
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This note was uploaded on 04/12/2008 for the course BUS 320 taught by Professor Sloan during the Fall '08 term at N.C. State.

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BUS 320-chapter 4 notes - BUS 320 Chapter 4 Analysis of...

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